GRAND RAPIDS — Even an eye-popping commercial land purchase in Muskegon County in the second half of 2008 can't stem the economic tide that will flatten the commercial real estate market this year.

Commercial development and other real estate deals will be stalled in 2009 as all segments -- retail, office and industrial -- are hit by the recession that deepened late last year with a credit crisis and rising unemployment rates.

That was the conclusion of the commercial real estate and economic experts gathered at DeVos Place Friday for the Grubb & Ellis/Paramount Commerce West Michigan forecast.

"Retail has been one bright spot in West Michigan, riding a good wave," said Grubb & Ellis' Dave Denton. "But the wave of momentum has hit the beach."

COMMERCIAL INTEREST

Here are some stores and restaurants which were exploring the West Michigan market for expansions in 2008. Their interest, in the current economic climate, is unknown:

A holiday retail sales decline of 2.7 percent -- the worst in 40 years -- combined with store closings and retail company bankruptcies have not only hurt the national real estate market but also West Michigan's and Muskegon's.

In Muskegon, the Manistee-based Little River Band of Ottawa Indians' purchase of 233 acres along I-96 in Fruitport Township last year -- including the former Great Lakes Downs racetrack property -- has had no effect on commercial land prices in the county, Grubb & Ellis officials said. The tribe paid $13.5 million for the property in hopes of developing a casino, entertainment and retail complex in the future.

"It was just a blip," Grubb & Ellis' Tom DeBoer said of the tribe's land purchase. "Those large tracts of land sold in a cash deal. It could mean a great number of jobs and be the largest casino in Michigan. But it is a three-to-five-year play."

So Muskegon sits with the rest of West Michigan simply hoping to hold on through 2009. Regional commercial real estate experts see West Michigan in position to break out of the current economic downturn faster than other parts of the state and the nation.

"In West Michigan, we were in first gear to neutral and made the adjustment (to the recession) much easier," said Bill McGee, the head commercial real estate lender for Wells Fargo Bank in West Michigan. "Other areas were going 110 mph when they hit the brick wall. I think we are in a better position to go forward when things pick back up."

Economic and real estate forecasts show the economy not turning around until the second half of 2009, if not until 2010 or 2011.

One retailer that has weathered the current economic storm is Grand Rapids-based Meijer Inc. Muskegon County's leading retailer over the past decades is in the process of completing an upgrade of its Norton Shores store.

"We are faring better than other retailers," Meijer Vice President of Real Estate Mike Kinstle said. "People today are still eating and, luckily, in the Midwest we like to eat a lot. Our food (business) remains strong, as general merchandise is down. Overall, we had a really strong year."